UNITED STATES INTERNATIONAL TRADE COMMISSION
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`Washington, D.C.
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`In the Matter of
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`CERTAIN TABLE SAWS INCORPORATING ACTIVE
`INJURY MITIGATION TECHNOLOGY AND
`·COMPONENTSTHEREOF
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`Inv. No. 337-TA-965
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`ORDER NO. 10:
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`INITIAL DETERMINATION GRANTING COMPLAINANT'S
`UNOPPOSED MOTION FOR SUMMARY DETERMINATION
`THAT IT HAS SATISFIED THE ECONOMIC PRONG OF THE
`DOMESTIC INDUSTRY REQUIREMENT
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`I.
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`INTRODUCTION
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`(March 22, 20 16)
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`On January 27, 2016, Complainants SD3, LLC ("SD3") and SawStop, LLC ("SawStop"),
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`hereinafter referred to as SawStop, moved for summary determination that it satisfied the
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`"economic prong" ofthe domestic industry requirement of 19 U.S.C. § 1337(a)(2) and (3).
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`(Motion Docket No. 965-005). SawStop simultaneously submitted a Memorandum and a
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`proposed Statement of Undisputed Facts (SUF) in support of its Motion.
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`On February 8, 2016, Respondents Robert Bosch Tool Corporation and Robert Bosch
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`GmbH, hereinafter referred to as Bosch, filed Respondent's Statement of Non-Opposition to
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`Complainants' Motion for Summary Determination That They Have Satisfied the Economic
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`Prong, in which Bosch stated it does not oppose SawStop's Motion.
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`SawS top contends there is no genuine issue of material fact that since its founding in
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`2000, it has actively exploited the inventions claimed by the Asserted Patents, including efforts
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`to license its inventions and later by successfully entering the table saw market by developing,
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`producing, and selling saws practicing their inventions. (Memorandum at 1.) SawStop alleges
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`SD3 Exhibit 2007 – Page 1
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`there is no genuine issue of material fact that it has made substantial domestic investments to
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`exploit the Asserted Patents through engineering, technical services, sales and marketing,
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`logistics and administrative support, while increasing its investments in domestic plant and
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`equipment to support its domestic workforce. (Id.) Therefore, Saw Stop alleges it is entitled to
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`_an initial determination that it has satisfied the economic prong of the domestic industry
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`requirement stated in 19 U.S.C. § 1337(a)(2) and (3).
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`II.
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`FINDINGS OF MATERlAL FACT
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`As mentioned above, SawStop proposed a SUF in support of its Motion and
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`Memorandum. In consideration of the proof it provided in support of its SUF and the absence of
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`an objection to its SUF by any other party in this investigation, I find SawStop's SUF as
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`established. Accordingly, I adopt the 25 facts that follow (including subheadings) for this
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`determination.
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`1.
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`SD3 and Sa\vStop are Oregon limited liability companies founded in 2000 by Stephen
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`Gass with three colleagues - David Farming, David Fulmer and David D 'Ascenzo. SD 3 was
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`·,
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`formed to own intellectual property related to active injury mitigation technology, while
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`SawStop was formed to engineer and develop power tools equipped with this technology. SD3
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`owns 100% of SmvStop and the patents asserted in this investigation. (SUF at ~ 1 (citing Ex.1
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`,-r 2; Compl. ~~ 2, 6-8 and Ex. 34 thereto at ,-r 3).i
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`2.
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`Shmily after filing their first patent applications on inventions related to actiYe ir~jury
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`mitigation technology in late 1999, Complainants' principals began to seek licenses from existing
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`saw manufacturers. They refined prototype saws, demonstrated them at trade shows, and
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`1 "Ex. 1" refers to the Declaration of Stephen Gass in support of SawStop's Motion, anached as
`Exhibit 1 thereto. "Compl." refers to SawStop's Amended Complaint. (See Marion at 2:
`Motion, Ex. 1.)
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`traveled the world to promote the adoption of active injury mitigation technology and the
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`licensing of their inventions. Although SawStop received a tremendous amount of support and
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`attention from the woodworking community, they were unable to convince a major power tool
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`manufacturer to license their inventions. (SUF at~ 2 (citing Ex.l ~ 3; Compl. ~ 11).)
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`3.
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`After it became clear to Complainants' principals that existing manufacturers were not
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`going to license their inventions, they decided to exploit SD3 's intellectual property by
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`developing, building and selling table saws under the SawStop brand. This was an
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`extraordinarily difficult task for them because they were starting from the ground up. They were
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`supported during this time by angel investors in SD3 -largely friends and family. In late 2004,
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`SawStop launched its first commercial cabinet saw featuring patented inventions in active itDury
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`mitigation technology. (SUF at~ 3 (citing Ex. 1 ~ 4; Compl. ~~ 12-13).)
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`4.
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`In March 2005, SawStop received word that a worker at a cabinet shop in Arkansas had
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`accidentally contacted the spinning blade on a SawStop saw and the saw worked as expected,
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`stopping the blade instantly and leaving the worker with only a scratch. After that, SawStop
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`began receiving regular reports of "finger saves." The number of finger save reports SawS top
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`has compiled now exceeds 3,500. (SUF at~ 4 (citing Ex. 1 ~ 5; Compl. ~ 13).)
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`5.
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`By 2007, SawStop believed its saws had become the best-selling industrial table saws in
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`the market. (SUF at~ 5 (citing Ex. 1 ~ 6; Compl. ~ 13).)
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`6.
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`SawStop's table saws have received numerous awards, including: the U.S. Consumer
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`Product Safety Commission Chairman's Commendation for Substantial Contributions to Product
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`Safety; the Breakthrough Award from Popular ~Mechanics magazine; One of the 100 Best New
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`Innovations from Popular Science magazine; One of the Top 10 Tools from Workbench
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`magazine; Award of Quality Editor's Choice from Workbench magazine; Reader's Choice Award
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`from Woodshop News magazine; Best Innovations from Time magazine; Woodwork Institute of
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`California Endorsement; Sequoia A ward from the Association of Woodworking & Furnishings
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`Suppliers; Imhotep Award from the International Social Security Association; Nova Award from
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`the Construction Innovation Forum; Editor's Choice Award from Tools of the Trade magazine;
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`. Editor's Best Overall Choice and Readers Choice Awards from Taunton's Tool Guide; the
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`Heartwood Award from the Architectural Woodwork Institute; and the Innovation Award from
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`Handy Magazine. (SUF at~ 6 (citing Compl. ~ 14 and Ex. 14 thereto).)
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`7.
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`After proving its technology in the marketplace, SD3 's principals were contacted by
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`several power tool companies about licensing their inventions related to active injury mitigation
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`technology. SD3 's principals had extensive discussions with several companies, including
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`Respondents, but were unable to conclude a license on mutually acceptable terms. (STJF at~ 7
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`(citing Ex. 1 ~ 7).)
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`8.
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`Complainants have built their business around their patented inventions related to active
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`injury mitigation technology, and they have developed a suite of different table saw products,
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`expanding into new markets, most recently culminating in their release of SawStop's portable
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`job site saw in early 2015. Complainants' business is now thriving and growing quickly as more
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`and more consumers demand the safety measures that SawS top provides. (SUF at ~ 8 (citing Ex.
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`1 ~ 8).)
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`THE DOMESTIC INDUSTRY PRODUCTS
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`9.
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`SawStop's business relates to table saws featuring inventions related to actiYe injury
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`mitigation technology protected by the patents asserted in this investigation. Every saw
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`SawStop currently designs, develops, produces and sells practices the asserted patents in the
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`same way. Every cartridge, component and accessory SawStop makes or sells is designed
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`solely for use with SawStop's saws. SawStop's entire business revolves around the inventions
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`related to active injury mitigation technology covered by the asserted patents. (SUF at ~ 9
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`(citing Ex. 1 ~ 9; Compl. -~~ 73, 75).)
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`10.
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`SawStop currently sells four categories of table saws: industrial cabinet saws (ICS);
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`_professional cabinet saws (PCSi, contractor saws (CNS) andjobsite saws (JSS). Within these
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`product categories, SawStop has various model numbers depending on product configurations.
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`(SUF at~ 10 (citing Ex. 1 ~ 10 and Ex. A thereto).)
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`DOMESTIC INVESTMENTS RELATED TO THE
`EXPLOITATION OF THE ASSERTED PATENTS
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`12.
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`SawStop's table saws were developed by SawStop in the United States through years of
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`research and development, and are produced to SawStop's specifications by contract
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`manufacturers in Taiwan. Most of SawStop's saws are first shipped to SawStop's Tualatin,
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`Oregon facility where they are carefully inspected and reworked as needed by SawStop's US
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`employees prior to shipment to dealers and distributors. (SUF at~ 12 (citing Ex. 1 ~ 12).)
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`SawStop sells 3 horsepower and 1.75 horsepower PCS saws, and sometimes tracks these
`as separate product categories for financial purposes. (Ex. 1, ,[ 1 0).
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`13.
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`All SawS top domestic employees engage in either research and development, technical
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`service, sales and marketing, logistics or administrative functions in support of SawStop's table
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`saws. Except for five quality control personnel in Taiwan, all SawStop employees are located in
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`the United States, and most of them work in SawStop's Tualatin, Oregon facility. (SUF at~ 13
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`_(citing Ex. 1 ~ 14; Compl. ~ 75 and Ex. 34 thereto at~ 6).)
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`14.
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`Dr. Stephen Gass, the President of SawStop, is actively engaged on a daily basis in on-
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`going research and development of SawStop's table saws that employ SawStop technology(cid:173)
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`including supporting and improving current models and developing future products that will
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`implement Complainants' inventions related to active injury mitigation technology. (SUF at~ 14
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`(citing Ex. 1 ~ 15; Compl. Ex. 34 ~ 6).)
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`15.
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`SawStop' s engineering group is led by David Fulmer, its Vice President of engineering.
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`Mr. Fulmer is an electrical engineer and co-founder of the company. In addition to Mr. Fulmer
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`(an electrical engineer), SawStop presently employs six mechanical engineers, two electrical
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`engineers and one engineering assistant. These engineers focus on research and development of
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`new products and engineering relating to sustaining and improving existing SawStop products.
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`Nearly all of SawStop's engineering activities relate to SawStop's safety technology and products
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`incorporating that technology, or accessories designed to be used with such products.
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`Additionally, another one of SawS top's founders, David Fanning, works closely with
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`engineering to oversee the protection of intellectual property associated with Sa-vvStop' s research
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`and development. (SUF at~ 15 (citing Ex. 1 ~ 16; Compl. Ex. 34 at~ 6.))
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`16.
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`SavvStop's technical service is handled by a group of four technicians and a service
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`manager. These technicians respond to e-mails and telephone calls from consumers and
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`distributors, spending a considerable portion of their time working with SawStop's proprietary
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`safety technology. (SUF at~ 16 (citing Ex. 1 ~ 17; Compl. Ex. 34 at~ 7).)
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`17.
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`SawStop's sales and marketing groups comprise twelve individuals- three in marketing,
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`eight in sales and an Executive Vice President who oversees both groups. SawStop's sales
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`. managers are located across the United States. SawStop's primary marketing and sales
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`messaging relates to its safety technology. (SUF at~ 17 (citing Ex. 1 ~ 18; Compl. Ex. 34 at~
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`8).)
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`18. SawStop's logistics group manages shipping, receiving and warehousing for SawStop's table
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`saws, and comprises approximately fifteen to twenty employees. Several of these employees
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`handle reworking saws and programming and packaging SawStop's brake cartridges in Oregon.
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`(SUF at~ 18 (citing Ex. 1 ~ 19; Compl. Ex. 34 at~ 9).)
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`19.
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`SawStop's administrative group comprises approximately nine employees, some ofwhom
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`are involved in data capture from expended and returned brake cartridges. SawStop uses this
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`data to improve its products' active injury mitigation technology. (SUF at ~ 19 (citing Ex. 1 ,) 20;
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`Compl. Ex. 34 at~ 1 0).)
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`3
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`Since July, 2015, SawStop has occupied and paid rent on 30,000 square feet of this space
`as it consolidated warehouse space for the transition and moved inventory to its new :i'vfyslony
`facility. (Ex. 1 at~ 26).
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`III.
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`LEGAL STANDARDS
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`Commission Rule 210.18 provides that "[a]ny party may move ... for a summary
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`determination in its favor upon all or any part of the issues to be determined in the investigation."
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`19 C.F.R. § 210.18(a). Summary determination "shall be rendered ifpleadings and any
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`depositions, answers to interrogatories, and admissions on file, together with the ·affidavits, if
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`·- ·"">
`any, show that there is no genuine issue as to any material fact and that the moving party is
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`entitled to summary determination as a matter oflaw." 19 C.F.R. § 210.18(b).
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`In evaluating a motion for summary determination I must evaluate the evidence "in the
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`light most favorable to the party opposing the motion.,. See, e.g., Certain Personal Computers
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`and Digital Display Devices, Inv. No. 337-TA-606, Order No. 20 at 2 (Jan. 11, 2008) ("Personal
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`Computers'} Nevertheless, the non-moving party "has the burden to submit more than
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`averments in pleadings or allegations in legal memoranda. Mere denials or conclusory
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`For financial and tax reasons, this facility was purchased by a newly-formed 100%
`subsidiary of SD3 called Myslony, LLC. (Ex. 1 at~ 27)
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`statements are insufficient." Certain Magnetic Response Injection Systems and Components
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`Thereof, Inv. No. 337-TA-434, Order No. 16 at 5 (Sept. 26, 2000) (citations omitted). This
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`means the "[the non-moving party] must do more than simply show there is some metaphysical
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`doubt as to the material facts" to avoid summary determination. Certain Electronic Devices,
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`Including Mobile Phones, Portable Music Players, and Computers, Inv. No. 337-TA-701, Order
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`No. 58 at 4, 10, 15 (quoting Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586
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`(1986)) ("Electronic Devices"); accord Certain Electronic Devices with Image Processing
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`Systems, Components Thereof and Associated Software, Inv. No. 337-TA-724, Order No. 29 at
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`3, 16-17 (Mar. 11, 2011) (non-reviewed). As noted, with regard to this Motion, the absence of
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`any opposition by Bosch justifies taking SawStop's SUF at face value.
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`To obtain relief in a Section 33 7 investigation, a complainant, in a patent-based case,
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`must prove a domestic industry exploiting the patent(s) at issue exists in the United States. See
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`19 U.S.C. § 1337(a)(2); see also Certain Microsphere Adhesives, Process for Making Same, and
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`Products Containing Same, Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366,
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`Comm'n Op. at 8 (1996). The domestic industry requirement of Section 337 in patent-based
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`cases consists of a "technical prong" and an "economic prong." See, e.g., Certain Unified
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`Communications Systems, Products Used with Such Systems, and Components Thereof, Inv. No.
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`337-TA-598, Order No.9 at 1-2 (Sept. 5, 2007) ("Communications Systems"). Complainants
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`satisfy the "technical prong" when they prove their activities relate to an article protected by the
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`patent. (See id) Complainants satisfy the "economic prong" ofthe domestic industry
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`requirement when they establish "that the economic activities set forth in subsections (A), (B),
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`and/or (C) of subsection 337(a)(3) have taken place or are taking place with respect to the
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`protected articles.". Subsection 3 3 7 (a )(3) states, in relevant part, that
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`an industry in the United States shall be considered to exist if
`there is in the United States, with respect to the articles
`protected by the··' patent ... concerned-
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`(A) significant investment in plant and equipment;
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`(B) significant employment of labor or capital; or
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`(C) substantial investment in its exploitation, including
`engineering, research and development, or licensing.
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`19 U.S.C. § 1337(a)(3).
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`Satisfaction of any these three factors is sufficient to satisfy the economic prong of the
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`domestic industry requirement. Certain Printing and Imaging Devices, Inv. No. 337-TA-690,
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`Comm'n Op. at 26 (Feb. 17, 2011) ("Printing and Imaging Devices") (citing Certain Variable
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`Speed Wind Turbines and Components Thereof, Inv. No. 337-TA-376, Comm'n Op. at 15
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`(Nov. 1996)). To establish a domestic industry under sections 337(a)(2) and 337(a)(3)(A) and
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`(B), "a complainant's investment in plant and equipment or employment of labor or capital
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`must be shown to be 'significant' in relation to the articles protected by the intellectual
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`property right concerned. This means that whether the complainant's investment and/or
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`employment activities are 'significant' is not measured in the abstract or in an absolute sense,
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`but rather is assessed with respect to the nature of the activities and how they are 'significant'
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`to the articles protected by the intellectual property right." Printing and Imaging Devices,
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`Comm'n Op. at 26. See also, with respect to section 337(a)(3)(C), Certain Loom Kits for
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`Creating Linked Articles, Inv. No. 337-TA-923, Comm'n Op. at 5-8 (June 26, 2015) (finding
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`the economic prong satisfied under section 337(a)(3)(C) when there were substantial domestic
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`investments in, inter alia, advertising, marketing, rent, creating manuals, website costs, and
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`Y ouTube instructional videos).
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`Qualitative and quantitative factors must both be considered in evaluating whether the
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`economic prong is satisfied. See Lela Inc. v. fTC, 786 F.3d 879, 883-85 (Fed. Cir. 2015). But
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`satisfaction of the economic prong is not determined by a rigid formula. See, e.g, Certain GPS
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`Chips, Associated Software and Systems, and Products Containing Same, Inv. No. 337-TA-596,
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`_Order No. 37 (Feb. 27, 2008) ("GPS Chips"). Instead, "whether a complainant has established
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`that its investment and/or employment activitie,s are significant with respect to the articles
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`protected by the intellectual property right concerned" is freely evaluated. Printing and Imaging
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`Devices, Comm'n Op. at 27. There also is no requirement that proof of the economic prong is
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`dependent on a "minimum monetary expenditure" or "need to define or quantify the industry
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`itself in absolute mathematical terms." See Certain Video Displays, Components Thereof and
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`Products Containing the Same, Inv. No. 337-TA-687, Order No. 20 at 5 (May 20, 2010) ("Video
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`Displays") (quoting Certain Stringed Musical Instruments and Components Thereof Inv. No.
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`337-TA-586, Comm'n Op. at 25-26 (Dec. 2009) ("Stringed Instruments")).
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`Rather. domestic industry is evaluated "on a case by case qasis in light of the realities of
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`the marketplace and encompasses not only the manufacturing operations but may include, in
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`addition, distribution, research and development and sales." Certain Mobile Telephone Handsets
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`Wireless Communication Devices and Components Thereof Inv. No. 337-TA-578, Order No. 33
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`at 5 (Feb. 16, 2007) ("l~vfobile Telephone Handsets") (quoting Certain Dynamic Random Access
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`Memories. Components Thereof and Products Containing Same, Inv. No. 337-TA-242, Comm'n
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`Op. at 62 (1987)); Certain Liquid Crystal Displays and Products Containing Same, Inv. No. 337-
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`TA-631, Order ~o. 18 (Sept. 23, 2008) ("LCDs") ("The Commission has adopted a flexible and
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`market-oriented approach in determining the existence of a domestic industry."). Along the way,
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`I, as an Administrative Law Judge should consider the industry in question, the complainant's
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`relative size, the value added to the article in the United States by the domestic activities, and the
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`relative domestic contribution to the protected article by comparing complainant's product(cid:173)
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`related domestic activities to its product-related foreign activities. See Printing and Imaging
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`Devices, Comm'n Op. at 27.
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`Recognizing that parties may not keep precise record of how their costs are incurred, the
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`Commission stated that: "A precise accounting is not necessary, as most people do not document
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`their daily affairs in contemplation of possible litigation." Electronic Devices, Order No. 58 at 5
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`(citations omitted). Thus, when complainants use reasonable allocations for the purposes of
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`establishing the economic prong of the domestic industry requirement, that will be sufficient.
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`See, e.g., Certain Toner Cartridges and Components Thereof, Inv. No. 337-TA-740, Order No.
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`26 at 12 (June 1, 2011) (relying on sales-based allocation which is "a formula accepted by the
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`Commission in past investigations"); Certain NOR and NAND Flash Memory Devices and
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`Products Containing Same, Inv. No. 337-TA-560, Order No. 37 at 5-6 (Nov. 17, 2006) (granting
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`summary determination where complainant based investments on reasonable allocation).
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`IV.
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`DISCUSSION
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`A.
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`Domestic Industry Products
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`SawStop has established:
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`1. Its entire business relates to table saws featuring inventions protected by all of the
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`patents asserted in this investigation. (SUF ~ 9.)
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`2.
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`It sold
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` table saws valued at
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` in 2014. (SUF~ 11.)
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`3. It sold
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` table saws valued at
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` in the first nine months of2015. (ld.)
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`4.
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`It had
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` table saws in inventory as ofNovember 4, 2015. (ld.)
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`5. Every saw of the four types of table saws it currently designs, develops, produces, and
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`sells, practices each of the Asserted Patents in the same way and every product that
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`SawStop sells is designed solely for use with its saws. (SUF ~~ 9 and 1 0.)
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`In sum, SawStop's entire business is focused upon the exploitation of the asserted patents.
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`_(SUF~ 9.)
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`B.
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`SawStop's Domestic Investments
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`SawStop developed its table saws in the United States following years of research and
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`development and it has continued to pursue its research and development effort. (SUF ~~ 12,
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`14, and 15.) SawS top currently employs six mechanical engineers, two electrical engineers,
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`and one engineering assistant, who focus on research and development of new products and
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`engineering relating to sustaining and improving existing SawStop products. (SUF~ 15.) At
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`present, nearly all of SawStop's engineering activities relate to SawStop's safety technology
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`and products incorporating that technology, or accessories designed to be used with such
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`products. (ld.)
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`SawStop's developed its entire lineup oftable saws in the United States through
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`years of research and development. (SUF~ 12.) In turn, the table saws are produced to
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`SawStop's specifications by contract manufacturers in Taiwan and most of SawStop's saws
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`are first shipped to SawStop's Tualatin, Oregon facility for inspection and reworked as .
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`. needed by SawStop's US employees before to shipment to dealers and distributors. (Jd.)
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`SawStop's domestic employees engage in research and development, technical service,
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`sales and marketing, logistics or administrative functions in support of SawS top's domestk
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`industry products. (SUF ~ 13.) Except for five quality control personnel in Taiwan, SawStop's
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`SD3 Exhibit 2007 – Page 14
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`employees work in the United States, and the majority ofthem work in SawStop's Tualatin,
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`Oregon facility. (!d.)
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`SawS top accomplishes technical support through the efforts of four technicians and a
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`service manager. (SUF ~ 16.) These individuals respond to e-mails and telephone calls from
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`_consumers and distributors and spend significant effort working with SawStop's proprietary
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`safety technology. (!d.)
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`SawStop has 12 employees in its sales and marketing group, three in marketing, eight in
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`sales, and an Executive Vice President who oversees both groups. (SUF ~ 17.) SawStop's sales
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`managers are located across the United States and they communicate SawStop's primary
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`marketing and sales message of the safety of its technology. (!d.)
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`SawStop's logistics group (approximately 15 to 20 employees) manages shipping,
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`receiving and warehousing for SawStop's table saws. (SUF ~ 18.) In addition, several its
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`logistics group employees rework saws and program and package SawStop's brake
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`cartridges 5 in Oregon. (!d.)
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`SawS top's employs nine employees in its administrative group and some these
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`employees are involved in data capture from expended and returned brake cartridges. (SUF
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`~19.) SawStop uses data from returned and expel).ded brake cartridges to improve the active
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`injury mitigation technology inherent in its table saws. (!d.)
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`5
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`I take notice that the table saw brake cartridges are designed to be an expendable or
`sacrificial item and are a key component of its Domestic Industry products.
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`SD3 Exhibit 2007 – Page 15
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`C.
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`The Costs Attributable to SawStop's Domestic Employment of Labor and
`Research and Development Under Section 337(a)(3)(B) and (C) and The
`Significance of These Costs
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`SawStop employs all of the individuals described in Section B, above, in the United
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`States. SawStop made the following domestic investments in labor in 2014:
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`Group
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`Engineering
`Technical Service
`Sales & Marketing
`Logistics
`Administration
`Total:
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`·.
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`Headcount
`(people employed during the year)
`18
`7
`13
`20
`11
`69
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`Labor Expenses
`·(payroll & payroll taxes)
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`
`
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`(SUP~ 20.) SawStop also incurred
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` in employee benefits (i.e. medical, dental and
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`disability insurance, and matching contributions to retirement plans) in 2014. (SUF ~ 21.)
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`SawStop provides fully paid medical and dental coverage to all full-time employees and
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`their families. (I d.)
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`In the first half of 2015, SawS top made the following domestic investments in labor:
`
`Group
`
`Engineering
`Technical Service
`Sales & Marketing
`Logistics
`Administration
`Total:.
`
`Headcount
`·
`.·:.
`.·
`,·:.s.;i::;.J,,··Labor Expenses
`~ir'~cP~Ytoll & payroll taxes)
`(people employed duringthe . .ter.tiij
`13
`
`7
`
`12
`
`25
`
`12
`
`69
`., .. " : ..
`
`. !i.z'}O.
`
`t[l~ lr{-~f,'~~~:·t~i~
`
`:
`
`
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`(SUF~ 22). SawStop also incurred, in the first halfof2015,
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` in employee benefits (i.e.
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`medical, dental and disability insurance, and matching contributions to retirement plans). (SUF
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`~23).
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`SD3 Exhibit 2007 – Page 16
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`SawStop's domestic labor costs are both qualitatively and quantitatively significant. The·
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`costs are qualitatively significant because they directly contribute to and are inherent to the
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`continued developmentjmprovement, production, and sales ofSawStop's Domestic Industry
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`Products. (SUF~~ 12-20.) In other words, without SawStop's R&D, logistical support,
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`. technical service, administration, and sales and marketing, SawStop would be unable to have
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`successfully exploited the patents underlying its Domestic Industry Products.
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`SawStop's domestic labor costs are also quantitatively significant. In 2014, these costs of
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`approached 19% of its gross sales of
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`. In the. first three quarters of2015,
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`these costs approached 11% of its gross sales of
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`. What is more, more than half of
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`all of Saw Stop's labor costs have been attributable to effort that directly or indirectly supported
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`its R&D costs. (Id) I find this evidence, by any measure, conclusively establishes quantitative
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`s.ignificance of SawStop's labor and R&D effort costs.
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`D.
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`The Costs Attributable to SawStop's Domestic Investments in Plant and
`Equipment Under Section 337(a)(3)(A) and Their Significance
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`SawStop has been located in a 40,000 square foot facility at 9564 SW Tualatin Road in
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`Tualatin, Oregon, for several years. (SUF~ 24.) The Tulatin facility comprises SawStop's
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`research and development, warehouse and office space. (!d) In 2014, SawStop paid
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`
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`in rent for this facility; in the first half of2015, SawStop paid
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` in rent for this facility.
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`(Jd) SawStop declared
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` in physical capital to Washington County, Oregon in 2015 for
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`purposes of personal property taxes. (Jd)
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`Nevertheless, SawStop has outgrown its present location and has begun moving to a new,
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`125,000 square foot facility that SD3 's subsidiary, Myslony, LLC, purchased in April2015 for
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` (purchased by a newly-formed 100% subsidiary of SD3 called Myslony, LLC for
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`business and tax reasons). (SUF ~~ 25 and 27.) SawStop uses the Myslony facility to warehouse
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`some of its inventory while the facility is undergoing
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` in capital improvements, an
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`effort that employs a substantial number of SawStop's contractors' laborers and subcontractors.
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`(SUF~ 25.)
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`Without its investments in plant and equipment, SawStop would be unable to exploit the
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`Asserted Patents. Hence, I find these investments to be qualitatively significant. The question of
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`whether these investments are significant or not, even while not opposed by the Respondent, is
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`not as clear. Specifically, SawStop only established it spent generally spent less than 1.25% of
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`its sales revenue in 2014 and 2015 on plant and equipment and there is no evidence in the record
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`establishing such an amount is significant. However, with the additional factor of the new
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`Myslony facility and the ongoing capital improvements
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` in total), I can conclude that
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`SawStop has made a significant commitment toward and is actually investing in plant and
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`equipment to exploit the Asserted Patents, especially since the exploitation of these patents is
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`SawStop's only line ofbusiness.
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`E.
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`Conclusion
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`Based upon SawStop's SUF, it is undisputed that SawStop established it meets the
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`requirements of Section 337's economic prong under subparagraphs (a)(2) and (3) of Section
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`337.
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`Hence, I find it is plain, as alleged by SawStop, that its domestic investments in labor,
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`plant, and equipment, as related to SawStop's Domestic Industry Products are:
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`Based upon the undisputed facts established by SawStop in the SUF supporting its
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`Motion, I find that the evidence, even when evaluated most favorably to the Respondents,
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`establishes there is no genuine issue of material fact. Specifically, I find that SawStop has
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`SD3 Exhibit 2007 – Page 18
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`conclusively and objectively established, with regard to the production of its various Domestic
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`Industry Table Saws (contended to practice the Asserted Patents) that it: (1) made a significant
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`investment in plant and equipment; (2) used significant employment of labor or capital within the
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`United States; and (3) invested substantially to exploit the Asserted Patents through expenditures
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`_on engineering, research and development. Accordingly, SawStop has established it met the
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`economic prong under 19 U.S.C. § 1337(a)(3)(A), (B), and (C).
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`Consequently, it is my Initial Determination that Motion No. 965-005 is hereby
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`GRANTED.
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`This Initial Determination, along with supporting documentation, is hereby certified to
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`the Commission. Pursuant to 19 C.P.R.§ 210.42(h), this Initial Determination shall become the
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`determination of the Commission unless a party files a petition for review of the Initial
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`Determination pursuant to 19 C.P.R.§ 210.43(a), or the Commission, pursuant to 19 C.P.R. §
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`21 0. 44, orders, on its own motion, a review of the Initial Determination or certain issues herein.
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`SD3 Exhibit 2007 – Page 19
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`Within 7 days of the date of this order, the parties shall jointly submit: (1) a proposed
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`public version of this order with any proposed redactions bracketed in red; and (2) a written
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`justification for any proposed redactions specifically explaining why the piece of information
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`sought to be redacted is confidential and